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Murphy v. Kenneth Cole Productions12/2/2005
CERTIFIED FOR PUBLICATION
Kenneth Cole Productions, Inc., (KCP) owner of small, upscale retail clothing stores, appeals from a judgment and a subsequent order regarding attorney fees in its appeal de novo of a decision of the California Labor Commissioner (Labor Commissioner).
On appeal, KCP raises issues regarding classification of plaintiff John Paul Murphy as a nonexempt employee, the court's jurisdiction to hear claims not raised before the Labor Commissioner, and the nature of the payments for meal and rest break violations as a penalty or a wage. KCP's other contention concerns whether KCP had a good faith dispute that precluded imposition of the waiting time penalty.
We will affirm the finding that Mu rphy was noTrial Judge: Honorable Anne Bouliane t an exempt employee. We agree with KCP that the court should not have addressed the new claims and that the meal and rest break payments are penalties, and reverse that portion of the judgment and remand for reconsideration of the amount of attorney fees. In all other respects, we affirm.
BACKGROUND
We first examine Murphy's daily work duties as a store manager. Murphy was hired as store manager of the KCP retail clothing store in the San Francisco Centre on Fifth and Market Streets in June of 2000 and worked for KCP until June 19, 2002. Murphy was paid a weekly salary of $836.50 and was not entitled to commissions on sales. In April of 2001, his pay was increased to $870 a week.
When Murphy was hired, he was given a job description for the store manager position. The store managers were the sales leaders, who were responsible for making sure the store met its sales quotas. They accomplished this task by acting as a leader on the sales floor, making sure inventory was properly managed and handling minor human resources issues according to procedures set out in the corporate operations manual. Murphy was trained by the manager of the Union Street store, who spent two days with Murphy, telling him who the strong sellers among the employees were, explaining security concerns and referring him to the operations manual.
The San Francisco Centre store primarily sold shoes. Murphy had no input into decisions about the shoes sold in the store, their pricing or whether they would be placed on sale. The corporate office and a visual manager directed all advertising. Sales goals were set by the corporate office. Murphy could make recommendations for the district manager's approval as to the needs of the store, but the district manager made the final decision.
District managers were responsible for ensuring that the stores met their sales quotas, had proper management and staffs, approved human resources related issues for the stores, such as issuing warnings and approving applicants for jobs. The district manager in Murphy's area was in charge of seven stores. The position of general manager of a flagship store was similar to Murphy's position, but was a department manager position, which included supervising other managers in their store who were similar to store managers. Their stores were considered separate districts, so they did not report to the regional manager.
Murphy did not have the authority to hire or fire an employee without obtaining approval. There were times that his recommendations on hiring were ignored. If discipline issues were clearly covered by the policy manual, Murphy could issue a verbal or written warning, but it needed approval from the district manager. If the issue was not clear, Murphy was required to refer it to human resources or the district manager.
Murphy testified that the operations manual was a guidel
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